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U.S. stocks continue to impress in absolute and relative terms in 2013. For the year so far (through July 9), no other major asset class even comes close. Based on a proxy ETF, the total return for U.S. equities in 2013 is nearly 17%. Using history as a guide, that's the equivalent of earning nearly twice the long-run performance in six months. Enjoy it while it lasts. At the opposite end of the spectrum: emerging market stocks, which are deeply in the red by almost 14%.

Keep in mind that a fair amount of the losses for foreign assets via U.S.-listed ETFs are a byproduct of the dramatic rally in the U.S. dollar lately. In other words, the stronger dollar has exacerbated losses in foreign markets from a U.S.-investor perspective.

The outer edges of the performance range is quite wide for a such a short period, which implies that rebalancing opportunities are uncommonly attractive. Yes, rebalancing comes with a fair amount of risk these days, perhaps more than usual. That's especially true if you have a fairly short time horizon. On the other hand, how comfortable are you with letting Mr. Market pilot your asset allocation strategy in the months ahead? Pick your poison.

For another perspective on how the year stacks up so far, here’s a recap of an equally weighted portfolio of all the major asset classes in terms of relative changes to the asset allocation. Using a start date of December 31, 2012, the chart below depicts the current portfolio structure and the range of allocations year to date. The strategy for this illustration is equally weighting everything and letting the unmanaged allocations fluctuate through yesterday’s close (July 9).

Finally, here's a graphical review of how the major asset classes have performed this year in relative terms through July 9, 2013. In the chart below, all the ETF prices have been reset to 100 as of December 31, 2012:

(click to enlarge)

Source: Asset Allocation And Rebalancing Review - July 9, 2013